Vodafone Spain (VfS) continued to put on display the pain it is experiencing from notoriously high content distribution costs in the country, saying it will not carry the Bein Sports channel, operated by broadcaster Mediapro, into the 2018-2019 season.

The move means – prospectively – that VfS could become the only major TV platform in the country to not offer top-flight European football, as well as taking many La Liga top-flight domestic programming off the table. Rivals Orange Spain and Telefónica España appear to remain locked in negotiations with Mediapro.

VfS has traditionally relied on premium sports, particularly football, to attract subscribers to Vodafone One, its “fully integrated” fixed, mobile, and TV service (Vodafonewatch, #148 and passim). However, the OpCo, along with Orange, has long complained over the costs of gaining access to sports content controlled by both Bein Sports (the exclusive domestic provider of UEFA Champions League football and the Europa League, as well as many La Liga matches) and incumbent Telefónica, which controls some La Liga programming (Vodafonewatch, #141 and passim). Beyond the direct price of content, VfS and Orange have also railed against regulatory modelling that allows Telefónica to build media rights expenses into wholesale broadband pricing.

António Coimbra, Chief Executive (CEO) of VfS, said revenue gleaned from Vodafone One subscribers that want to see Champions League and Europa League football did not justify the heavy outlays. The OpCo will still screen Telefónica’s Abono Fútbol channels, which cover Spain’s La Liga and Copa del Rey (the domestic cup competition), for now. Coimbra said he will only renew the contract if terms are greatly improved.

Orange has also reiterated unhappiness over Mediapro’s charges. Ramon Fernandez, Delegate CEO & Executive Director of Finance, Performance and Europe at Orange, confirmed that – unlike VfS – it had submitted a proposal to Mediapro for licensing of Champions League football coverage beyond the 2018-2019 season, but that Mediapro had not been “satisfied” with its bid. “Obviously, we’re not participating in [a] price increase that we don’t see as reasonable in the Spanish market. So now we’re starting, I would say, lateral negotiation”, said Fernandez.

Game, set, match

An El Español report suggested VfS is also getting cold feet on broadcasting motorsport channels Movistar Moto GP and Movistar F1. This is in spite of the Comisión Nacional de los Mercados y la Competencia, the country’s competition watchdog, forcing owner Telefónica to make the two channels available to third-party providers (Vodafonewatch, #141 and passim). The financial title further reported that, in February 2018, Amazon had held talks with each of the country’s operators about adding Amazon PrimeVideo to their content packages.

Crowd trouble

Although VfS saw year-on-year increases, albeit modest ones, to its subscriber base of fixed broadband and TV households, there was a worrying quarter-on-quarter decline for the three months ended 31 March 2018 (see charts). The number of TV subscribers dipped by 10,000 over that period, while subscribing broadband households fell by a more alarming 16,000. The OpCo attributed the falls to “high competitive intensity”, and has more broadly indicated it is embarking on a commercial spend drive that is likely to hit earnings in the coming months (see separate report)

Image: JESHOOTS / Pexels CC0

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